Gallup produced some interesting research and commentary in 2019 around the subject of the future of performance management. According to their research on performance management reviews, Gallup found that “only 14% of employees strongly agree their performance reviews inspire them to improve”. If that truly is the case, what can companies consider as more effective alternatives? It seems that the answer may lie in the area of coaching.
One of the biggest problems with performance reviews is that they are typically only held annually. This means that by the time an employee hears about a problem, it is already too late and much damage has been done. A further complication is that most managers have not been fully trained in effectively carrying out performance management reviews or create development plans.
While organizations like the Institute for Performance Management provide performance management training courses that help business managers to learn best practices in this area, not every manager has completed training courses like these. The result is that conversations are awkward, praise is seen as insincere and managers often try to do too much in the meeting, thereby losing focus.
The report continues that although many organizations are experimenting with various alternatives to the traditional performance management review, no clear winning option has emerged. At the same time, a few changes seem to be making a big contribution to better performance management across the board. For example, simplifying the entire process, keeping the flexible and ensuring that they are relevant to the work involved have all been seen as positive developments.
Although more frequent conversations between managers and employees sometimes provide an improvement in performance, this is also linked to how much performance management training the managers has received. In order for the manager to hold meaningful conversations with the employee they need to be able to give the employee clear advice such as “This is what you will need to do and achieve in order to be successful”. In order to be able to do that the manager needs to be able to identify what the employee is particularly good at, particularly weak at and understand what are their personal goals.
The Gallup research also noted that context is extremely important when it comes to improving performance management. The best results were seen where there was a culture of honest feedback and engagement, shared values and leaders that can be used as role models.
The report concludes that the success of performance management in the future is likely to come down to a manager’s ability to coach effectively. This means creating opportunities for frank and open discussion where a genuine dialogue can develop. Employees must feel that their opinions matter and that they are more than just a cog in the wheel of the organization. Most importantly, values must be aligned so that the individual’s goals and the organization’s goals are linked in a meaningful way.